Michael Watson, CFA, is an independent contractor who writes research reports for several investment publications. Watson refuses to sign contracts with exclusivity clauses. Watson sometimes revises work he submits to one publication and send slightly altered versions of the report to additional publications. Does Watson violate any CFA Institute Standards? A. No B. Yes, with respect to loyalty C. Yes, with respect to disclosure of conflicts. D. Yes, with respect to additional compensation.
A imo. Loyalty to employers doesn’t apply to independent contractors. However you might consider the publications his clients (but that would apply more if he was giving direct advice to investors and/or managing their portfolio). Same goes for B and C. There’s obvious conflict of interest from the info given
I said A to. What about this one? Frank Friendly is the top institutional salesman at Dewey, Cheatem, and Howe (DC&H) making a comfortable six-figure income. He has many active outside interests and is currently serving as a volunteer boardmember for a small, privately held, biotech firm that meets once per quarter. DC& H policies require that research personnel report any ownership in publicly traded securities and that sales personnel report any significant ownership (defined as an amount greater than 1% of the employee’s annual salary) to its compliance department. Friendly currently owns $900 worth of IBM stock, which he received as a gift from a relative. According to the Standards of Professional Conduct, which of the following is Friendly required to disclose to his employer? Board Seat-------IBM Stock No No Yes No No Yes Yes Yes
Board Yes IBM Stock No? (900/100,000) = 0.9%